Better Government Needed for Business Growth

London’s local and regional governance arrangements need to improve to sustain business investment and growth, the Commission on London Governance has heard.

Representatives from London’s business community expressed these views during a meeting this week with the Commission about ways to encourage firms to operate in the capital and invest more in public services. There is lack of clarity between who is responsible for running the capital, and clearer structures need to be set up.

The Commission discussed with London First, BT and Tribal Consulting waysofimproving how the private sector works with the capital’s public services and London boroughs.It wasfelt that Londoners should have more say in the running of public services.

The business groups told the Commission that better co-ordination of the education sector is needed to help bring disparate funding streams together. There is a concern that the Learning and Skills Councils are not working adequately with London’s regional development agency, andthe private sector should be helped to become more involved in
setting up training initiatives for local people.

TheCommission also heard that power and finance have to go together but if central government holds the purse strings, then there is no real devolution in London. People who pay tax should have more say in where their money goes. Business improvement districts were seen as working successfully as long as firms involved have a say on the amount of tax paid and what it is spent on.

It was felt that the Greater London Authority should have a more effective delivery system with the office of Mayor having increased powers. In particular for the funding of affordable housing, which should be taken over from the Government Office for London.

Hugh Malyan, Chair of the Commission on London Governance, said: “The capital’s local and regional governance arrangements appear to be hindering the private sector’s involvement in local communities, which need their funding. Businesses need to be clearer about who runs the capital to allow them to make appropriate investments in neighbourhood initiatives. The views from the business representatives at the meeting will feed into our consultation on London’s public services and whether they are working for Londoners.”

The Commission is holding a series of evidentiary hearings as part of a public consultation on its review of London governance. Sir Sandy Bruce-Lockhart, Chairman of the Local Government Association and Leader of Kent County Council, will attend the next Commission meeting on 19 April. The Commission will produce a report of its findings at the end of the year, which will seek to influence Government thinking on the best way that public services can be
delivered and made more accountable through local politicians.